{"title":"Delegation and strategic collusion under antitrust policies: An experiment","authors":"Jeong Yeol Kim","doi":"10.1016/j.chieco.2025.102361","DOIUrl":null,"url":null,"abstract":"<div><div>When firm owners delegate decision-making to managers, such as corporate executives who operate firms directly, a firm's behavior can vary depending on how the owner determines the incentives of the managers. This study employs a lab experiment to investigate the impact of delegation on collusive behavior of firms in a situation where antitrust policies exist. The experiment highlights the following two key findings: (i) Firms form cartels strategically, alternating their collusive and competitive output to evade antitrust regulations, rather than consistently producing collusive output to maximize joint profits; and (ii) Delegation does not necessarily increase the overall number of cartels, but it may change how cartels are formed.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"90 ","pages":"Article 102361"},"PeriodicalIF":5.5000,"publicationDate":"2025-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"中国经济评论","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1043951X25000197","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2025/2/7 0:00:00","PubModel":"Epub","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
When firm owners delegate decision-making to managers, such as corporate executives who operate firms directly, a firm's behavior can vary depending on how the owner determines the incentives of the managers. This study employs a lab experiment to investigate the impact of delegation on collusive behavior of firms in a situation where antitrust policies exist. The experiment highlights the following two key findings: (i) Firms form cartels strategically, alternating their collusive and competitive output to evade antitrust regulations, rather than consistently producing collusive output to maximize joint profits; and (ii) Delegation does not necessarily increase the overall number of cartels, but it may change how cartels are formed.
期刊介绍：
The China Economic Review publishes original works of scholarship which add to the knowledge of the economy of China and to economies as a discipline. We seek, in particular, papers dealing with policy, performance and institutional change. Empirical papers normally use a formal model, a data set, and standard statistical techniques. Submissions are subjected to double-blind peer review.
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